Are There Legal Limits on Leave Encashment in India? Seeking Clarity for MNC Policies

Inquiry on Leave Encashment Laws in India

Can someone confirm if there are any governing laws in India regarding the number of encashments that can be done on casual leaves, medical leaves, and privileged leaves?

I also want to check if there are any guidelines provided by establishments for designing leave policies. We have a stringent policy of no encashment, and I wanted to check if it is okay to continue that way or if we need to tweak it a little bit to meet expectations.

Thanks,
CareerTrek

Types of Leave, Eligibility, and Encashment

Types of leave, their eligibility, and encashment differ from company to company but are subject to provisions in the Factories Act, Plantations Labour Act, Mine Act, or the State's Shops and Commercial Establishments Act. Under these Acts, although the number of leaves may vary, encashment is considered to be a right of an employee. Therefore, you cannot have a different policy unless otherwise provided for in your certified Standing Orders or through a settlement reached with the employees. As an MNC, the scope of a settlement is very rare, and it is advisable to adhere to the rules provided in the respective Act under which the company is registered.

Regards,
Madhu.T.K